The First Trade… Remember yesterday’s warning shot?
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Plus ça change, plus c’est la même chose. Thursday’s gap down deviated from the two prior opens that had gapped up. But it copied their post-open action by trying to rally anyway. “Unfinished business below” at 2097.75 dragged price down into the noon hour. But the balance of the session rallied to pierce the 2107.00-2110.00 resistance that had contained prior highs. To the degree that its 1-tick margin is reliable, the afternoon’s bias-up signal left unfinished business above at 2109.00.
Overnight action’s new info…
That 1-tick margin doesn’t seem reliable, at all. Already dipping a couple of points into Thursday’s close, Globex extended lower to test 2102.00 by midnight. That was the rally’s penultimate objective 2107.00, which had held through Monday and Tuesday’s close. It performed better as resistance than as support, which melted away at Europe’s opens, now attacking 2091.00.
If, then…
Monday’s noon hour reaction to Yellen’s comments had dipped sharply to attack 2091.00. The interim recovery into Wednesday’s high was 20 points higher. Monday was the last morning that had been signaled to rally. Tuesday and Wednesday mornings rallied anyway, dooming themselves to failure, and creating a lower attraction. The attraction was neutralized by Thursday’s warning shot across the bow, which went on to create a higher target. The higher target that has been suspicious since being signaled, now absolutely dubious, when considering last night’s action in the context of what we’ve known all along — that reversing down would unfold quickly if at all. None of which will matter this morning if the open recovers back above yesterday’s close.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 back above 2100.50 would be unlikely to trigger the 2098.50 bias-down signal at 10:15. Exiting the open under 2092.25 would be unlikely to recover the 2093.25 bias-down target by 10:15 which would renew the bias-down signal, next targeting 2086.50.